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Saturday, December 31, 2011

Full judgment, including for interest and attorneys’ fees, was obtained recently for a Roger C. Wilson client in a commercial litigation in Cobb County Superior Court, by court order, before trial, as a sanction for violation of discovery rules by the opposing party.

The Wilson client was the plaintiff in the case, Willson v. Tselios, et al. (no relation between client and attorney), case no. 10-1-3929-49. The client had contracted to sell restaurant equipment to a commercial buyer under an installment purchase arrangement as a part of the disposition of a Sandy Springs restaurant of the Wilson client. The defendant-opponent, the buyer, failed or refused to make full payments under the contract even after taking possession of all the equipment. Only after the initiation of the litigation did the buyer raise allegations of lien-type encumbrances of the equipment, which allegations Wilson and his client rebutted.

The defendant-opponent repeatedly failed to properly respond to discovery requests (formal demands for information and documents about the case and defenses) submitted by Wilson on behalf of his client. After first obtaining orders from the Court requiring the defendant to fully respond to those discovery requests, Wilson ultimately moved the Court to enter judgment in favor of his client as a sanction when the defendant continually failed to provide such responses.

After the presentation of written briefs and oral arguments, the Court granted Wilson’s motion and entered judgment in favor of the Wilson client for the full amount demanded by the client in the case. In addition the Court granted Wilson’s request to add pre-judgment interest to the award, running from the time of the initial breach of the underlying contract. Post-judgment interest generally is available as a matter of right, but pre-judgment interest is not and is more difficult to obtain. Additionally, the Court awarded attorneys’ fees to the Wilson client in connection with the efforts to obtain the requested discovery.

Although courts have considerable leeway in fashioning remedies for violations of discovery rules, it is unusual to obtain an entry of final judgment against a litigant on this basis. That remedy generally is reserved for cases of very substantial violations by a litigant. Such was the case here, where the defendant repeatedly failed to respond to orders obtained from the Court specifically regarding discovery and related matters.

Defendants sometimes adopt such delaying tactics in order to increase the time and costs to a plaintiff of obtaining any judgment, hoping to dilute the plaintiff's resources and heart for the litigation before a trial is reached. A great advantage of obtaining judgment on the basis and at the stage of litigation obtained by the Wilson client in this case is that this mitigates such delays and costs. Occasionally, as in this case, the client is thereby able to obtain the full benefits sought in the litigation even without the expenses normally entailed by a trial of the case.

Roger C. Wilson represents companies and individuals in litigation in all state and federal courts in Georgia. He has represented many clients in commercial and other civil litigation, both as plaintiffs and as defendants.

Tuesday, December 6, 2011

The Roger C. Wilson Law Firm, PC has obtained the dismissal of a civil action filed against two of its clients in Cobb County, Georgia Superior Court involving a dispute over the sales of several area office buildings. In the case, Grund v. Crescent Holdings, et al., the former owner of the buildings sued to obtain the restoration of his ownership of the buildings. The office buildings had been sold by the Cobb Sheriff's Department in enforcement of judgments for many hundreds of thousands of dollars that had been obtained against the plaintiff by another party in separate litigation. In the Crescent Holdings case, the former owner of the buildings sued various defendants, including Cobb Sheriff's Department officials, seeking a court ruling that the Sheriff's sales were invalid as having been made at unreasonably low prices and allegedly otherwise contrary to law, and seeking a court order returning ownership of the buildings to the plaintiff.

The purchasers of the buildings also were sued in the case, including the two clients of Roger C. Wilson. After substantial pretrial proceedings, Wilson obtained a dismissal of all claims against both of his clients. A motion for an award of attorneys' fees to the Wilson clients remains pending.

Roger C. Wilson represents companies and individuals in litigation in all state and federal courts in Georgia. He has represented many clients in commercial and other civil litigation, both as plaintiffs and as defendants, including in the enforcement of judgments from assets located outside Georgia.

A federal Judge has rejected as unduly lenient a $285 million settlement reached between the U.S. Securities and Exchange Commission and Citigroup to resolve civil litigation by the SEC against the financial services giant for various alleged abuses, including some types widely thought to have materially contributed to the financial and real estate market collapses. Judge Jed S. Rakoff of the U.S. District Court for the Southern District of New York refused to accept the settlement, finding it inadequate in multiple respects, including the amount of the payment to be required of Citigroup and the fact that Citigroup would not be required to acknowledge any wrongdoing.

The SEC civil suit is based principally on Citigroup’s actions in marketing collateralized debt obligations (CDOs) to its customers as good investments while at the same time selling such instruments short itself (a technique essentially constituting a bet that the investment would drop in price in the future), and after having secretly included in the CDOs a great amount of highly undesirable assets, in order to unload those assets from its own books or accounts.

The proposed settlement is embodied in a consent decree providing for disgorgement of $160 million in profits by Citigroup and payment of $30 million in interest and $95 million in penalties, as well as the adoption bythe conglomerate of internal controls designed to hold company officials responsible for signing public statements regarding the worthiness of the investments marketed by the company.

Judge Rakoff wrote in his opinion that in deciding whether to grant the judicial approval that is prerequisite for such consent decrees involving injunctive relief, federal judges are required by US Supreme Court precedent to consider the public in relation to the decree. “[R]egretfully”, Judge Rakoff wrote, the proposed Citigroup consent judgment “is neither fair, nor reasonable, nor adequate, nor in the public interest." He noted that, while

[p]urely private parties can settle a case without ever agreeing on the facts . . .when a public agency asks a court to become its partner in enforcement by imposing wide-ranging injunctive remedies on a defendant, enforced by the formidable judicial power of contempt, the court, and the public, need some knowledge of what the underlying facts are: for otherwise, the court becomes a mere handmaiden to a settlement privately negotiated on the basis of unknown facts, while the public is deprived of ever knowing the truth in a matter of obvious public importance.

The judge expressed particular concern about the SEC practice of allowing companies to enter such consent judgments without admitting or denying the underlying allegations, which, he wrote, deprived the court of critical facts by which to assess the activities involved and the relief or punishment to be imposed.

Particularly in this context Judge Rakoff criticized the payment amounts provided in the settlement:

It is harder to discern from the limited information before the Court what the S.E.C. is getting from this settlement other than a quick headline. By the S.E.C.'s own account, Citigroup is a recidivist . . . , and yet, in terms of deterrence, the $95 million civil penalty that the Consent Judgment proposes is pocket change to any entity as large as Citigroup.

Consequently, Rakoff rejected the proposed consent judgment, consolidated the case with a separate, related case against an Citigroup official individually, and “direct[ed] the parties to be ready to try this case on July 16, 2012.”

This is the latest in a series of criticisms or refusals by Judge Rakoff to approve proposed settlements by the SEC with Wall Street corporate alleged wrongdoers. As another example, in 2009 he refused for months to approve a proposed settlement with Bank of America relating to alleged disclosure deficiencies in connection with its acquisition of Merrill Lynch. He only approved that settlement early the following year after the penalties against the company were increased from $33 million to $150 million and safeguards were added to inhibit such conduct in the future. He also stoutly criticized a settlement of backdating claims that the SEC reached with Vitesse Semiconductor earlier this year, decrying the same SEC practice of permitting the corporation to avoid admitting any wrongdoing. He stated, "The disservice to the public inherent in such a practice is palpable."

It is likely that the SEC will appeal Judge Rakoff’s rejection of the Citigroup settlement. But his reputation seems now established as a firebrand judge determined not to be used by the US Executive Branch as a rubber stamp for consent judgments that he considers to be mere slaps on large, powerful corporate wrists.

Federal criminal charges have been dismissed against two clients of Roger C. Wilsonand The Roger C. Wilson Law Firm, PC in two different cases several weeks apart.

One client was charged with marijuana offenses based on events in a federal park near Atlanta. Significant issues were discovered in a thorough review of the case, including in the reports of the investigating law enforcement officers, which issues supported the client's claim of innocence. Substantially as a result of those issues, and in the course of negotiations by Roger C. Wilson with the federal prosecutor, all charges against the client were dropped several days before trial.

Any crimes committed in federal parks or similar federally controlled or administered territories, such as on the Chattahoochee River or elsewhere in the Chattahoochee River National Recreation Area, are federal crimes and are prosecuted in federal courts.

In a separate case, another Wilson client was charged, along with several co-defendants, with multiple offenses involving alleged weapons trafficking, including the alleged illegal possession and distribution of an unregistered weapon. The charges, and similar charges against many other defendants in other cases, arose from a lengthy sting operation conducted by federal agents, principally from the Bureau of Alcohol, Tobacco and Firearms.

The agents established a storefront business in Southwest Atlanta as the base for an undercover operation in which they encouraged local residents to sell firearms and other items to the agents at the store, where the agents posed as legitimate business owners. Those lured into the operation then were charged with such crimes as engaging in or conspiring to engage in gun sales without being registered to do so under federal dealer licensing regulations. A number of such persons have reported not knowing of the existence of such registration requirements and regulations until their arrests. Other charges also were brought based on the involvement of certain weapons, such as sawed-off shotguns, which require registration to be possessed or sold.

All proceedings inside and outside the store were recorded by an elaborate network of hidden surveillance cameras and microphones. Wiretap recordings also were made of numerous telephone calls engaged in by the undercover agents with customers who had been lured to the store.

The client of Roger C. Wilson was indicted on multiple counts, relating both to the alleged illegal dealing and to the alleged possession and sale of an unregistered sawed-off shotgun. Shortly before trial the case was resolved, by means of a resolution of the lesser (in terms of sentencing) counts and then, just before trial, with a negotiated dismissal by federal prosecutors of the major count (also in terms of sentencing) and of the corresponding remainder of the case.

Roger C. Wilson represents clients charged with crimes and otherwise involved in government enforcement activities at the federal and state levels. He has represented individuals and companies facing actual or possible criminal prosecution in "white collar" and "blue collar" contexts, including by defending them at trial and by negotiating resolutions with state and federal prosecutors, as well as by negotiated resolutions with federal enforcement agencies in such areas as export controls, foreign assets controls, and customs and import regulations.

Saturday, July 16, 2011

In a dramatic turn of events the federal judge presiding in the perjury prosecution of star baseball pitcher Roger Clemens declared a mistrial for prosecutorial misconduct early in the government’s presentation of its case in chief against Clemens. Clemens is being prosecuted for allegedly making false statements in testimony before a Congressional committee investigating the use of performance-enhancing drugs in major league sports. He faces a maximum of 30 years imprisonment if convicted. Judge Reggie B. Walton of the United States District Court for the District of Columbia, where Clemens was being tried, issued his mistrial ruling when the prosecution displayed to the jury evidence that the judge had specifically ruled was inadmissible in the trial. It remains to be seen whether or not Clemens may and will be re-tried.

In his sworn testimony before the Congressional Committee Clemens denied using PEDs. Federal prosecutors allege that this testimony was false, and they indicted Clemens for perjury and related offenses. The Government is relying substantially in the case on the testimony of former Clemens friend and teammate, Andy Pettitte, who has alleged that Clemens admitted to him that he had used PEDs, in contradiction of Clemens’s Congressional testimony. The disputed evidence at trial was an affidavit (a written sworn statement) submitted by Pettitte’s wife in which she stated that Petttite had told her of the alleged admission to him by Clemens.

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Before the trial began the judge had agreed with Clemens’s defense lawyers, Rusty Hardin and Michael Attanasio, that the statement by Pettite’s wife was hearsay and as such was inadmissible in the criminal trial. Accordingly, the judge had forbidden not only the introduction of that affidavit at trial but also any mention of it to the jury. The judge also had granted earlier defense requests to bar any prosecution reference to other prominent athletes using PEDs, agreeing that such references would threaten to make the jury more likely to convict Clemens, invalidly, from guilt by association. Yet prosecutors did refer to such other alleged PED users in their opening statement. That drew a rebuke from Judge Walton, but he allowed the trial to continue after delivering a cautionary, corrective instruction to the jury.

THE FINAL STRAW

However, when the Government violated Walton’s second ruling, regarding the affidavit of Pettitte’s wife, the judge angrily stopped the proceedings, discussed the matter with counsel outside the presence of the jury, and then declared a mistrial and dismissed the jury, ending this prosecution of the case. He stated, “I think Mr. Pettitte’s testimony is going to be critical as to whether [Clemens] goes to prison”. Judge Walton, an appointee of President George W. Bush, complained that "government counsel [should not] do just what government counsel can get away with doing.” He stated that “a first-year law student” would know not to do what the Government did here, and stated, “we’ll never know what impact that has had on how this jury ultimately decides this case when we’ve got a man’s liberty at interest. I’m very troubled by this. I mean, we have expended a lot of government money to reach this point. * * * I don’t see how I can un-ring the bell.”

Walton rebuffed the prosecutors’ request to submit written briefs on the issue:

You’re not going to be able to convince me. Because if this man got convicted from my perspective, knowing how I sentence, he goes to jail. And I’m not going to, under the circumstances, when this has happened,, put this man’s liberty in jeopardy. He’s entitled to a fair trial; in my view he can’t get it now. And that was caused by the government.

POSSIBLE IMPLICATIONS

Judges often refuse to order a mistrial in such circumstances but instead often provide a cautionary instruction to the jury (e.g. to “ignore” the improperly introduced evidence) and then allow the trial to proceed. Such cautionary instructions are often criticized based on the perceived improbability that jurors can truly disregard such matter in their deliberations once they have heard or seen it—or, as Judge Walton put it, that they can “un-ring the bell” of the introduction of the evidence. Walton’s ordering of a mistrial seems clearly to indicate a substantial irritation by him with this the second major misstep of prosecutors at the outset of the trial. One could also wonder whether it may suggest a skepticism of or dissatisfaction by Walton with the quality of the underlying government's case more broadly.

RETRIAL?

The Government-caused mistrial comes after three years of preparation of the case against Clemens (and at least seven years after the larger investigation began) a process involving scores if not hundreds of Government personnel. It now leaves the issue of whether Clemens may and will be tried again under the indictment or whether he now may escape ultimate prosecution altogether, e.g., on the basis of the Constitutional doctrine of “double jeopardy”. That doctrine arises from the Fifth Amendment of the U.S. Constitution, which provides that "[no person shall] be subject for the same offense to be twice put in jeopardy of life or limb". Walton explicitly wondered about its application in this case and set a hearing on the matter for September. While it is said that “jeopardy attaches”, to start the application of this doctrine, when the jury is sworn and seated in a criminal jury trial, the application of the doctrine is uncertain where a prosecution ends not in a verdict but in a mistrial. It is possible, though perhaps not likely, that Judge Walton will conclude that the government actions were intentional and therefore will bar a retrial of Clemens. It is also possible, though probably even less likely, that the Justice Department will seek to prevent the federal prosecutors from re-trying the case against Clemens. Probably the most likely result is a retrial.

ROGER C. WILSONrepresents clients in federal and state criminal and civil trials trials, and in other and federal enforcement matters. He has represented an individual testifying before Congress in connection with the savings and loan situation, and he has participated in the representation of a foreign government in connection with a Congressional subpoena for sensitive documents provided by that government to the United States Executive Branch in a cooperative law enforcement activity concerning the scandal-ridden Bank of Credit and Commerce International or BCCI.

Wednesday, June 15, 2011

Roger C. Wilson recently participated with lead counsel from the Federal Defender Program, Inc. in the defense of a former Chief Financial Officer in a multi-defendant criminal securities fraud prosecution in federal district court in Atlanta. United States v. Darryl Horton, et al., No. 1:11-cr-00268-TCB-1. The client, Darryl Horton, of Michigan, former CFO of Conversion Solutions Holdings Corp., a Georgia company, was charged along with the former CEO and the former Chief Operations Officer in a seven-plus-count federal indictment involving alleged securities fraud, wire fraud, and conspiracy. In addition to those counts against all three defendants, the CEO was charged under the federal Sarbanes-Oxley law with falsely certifying corporate financial statements. The indictment involved alleged misstatements in corporate financial filings and in corporate press releases regarding the nature and valuation of various firm assets. The trial lasted two full weeks. Near the end of the trial, the former CEO, Rufus Harris, fled the jurisdiction, leading to a national manhunt for him by federal law enforcement agencies. At the start of the trial, Harris had chosen to waive his right to counsel, then representing him, and to represent himself in the trial. After Harris's flight the trial continued to completion in his absence. The federal jury convicted Harris (captured a week later in Utah) of all eight counts charged, and it convicted the former COO on most counts, each of those counts involving possible sentences of 20-years or more imprisonment and very large fines.

However, the former CFO, Mr. Horton, was acquitted on three counts and the jury was hung on the remaining four counts against him, when defense counsel and federal prosecutors resolved the remainder of the case against him. Substantial testimony and other evidence was presented to the jury that Mr. Horton was at most peripherally and unknowingly involved in the particular events underlying the indictment, in contrast with the other two defendants. Roger Wilson participated in the defense of Mr. Horton with Jake Waldrop and Thomas Hawker, both attorneys with the Federal Defender Program in Atlanta.

Roger C. Wilson has represented and advised many individuals and companies in connection with governmental investigations and enforcement activity involving alleged or possible violations of federal laws and regulations in the areas of export controls, foreign assets controls, the Foreign Corrupt Practices Act, import regulation and customs laws, and federal banking and mortgage fraud statutes. In addition to representation of clients in federal and state trials, he has represented such clients before federal agencies, including in resolving possible violations prior to the initiation of government enforcement activity, by voluntary disclosures and similar methods. He also has advised and assisted companies in designing and implementing corporate compliance programs designed to assist the corporations and their personnel in avoiding possible violations of federal laws in many of these areas.

A trial and appellate lawyer in Atlanta, Georgia, representing individuals and businesses in a wide variety of legal matters - business and commercial, personal law and personal injury, criminal defense and other government enforcement - in all Georgia state and federal courts.